The world has been watching with a mixture of anxiety and disbelief since February 28, 2026, when the United States and Israel launched Operation Epic Fury — a joint assault on Iran that killed Supreme Leader Ali Khamenei, shattered the country’s military infrastructure, and sent shockwaves across every major financial market. Now, almost three weeks in, the Strait of Hormuz effectively closed, and global equities in a sustained slide, the question investors are increasingly asking is a simple one: what happens when it’s over?
The Conflict in Context
Operation Epic Fury was not entirely unpredicted. After Iran and Israel exchanged missile strikes in 2024, and a preliminary 12-day air war occurred in June 2025, the intelligence community and market watchers had been pricing in the possibility of a larger confrontation. When it happened, it happened quickly. Nearly 900 strikes in the first 12 hours. Hundreds of Iranian retaliatory drones and ballistic missiles aimed at US bases in Bahrain, Jordan, Kuwait, Qatar, Saudi Arabia, Turkey and the UAE. A drone even struck Britain’s Akrotiri base on Cyprus. The conflict rapidly became the largest military engagement in the Middle East since the 2003 invasion of Iraq.
The economic consequences have been severe. Iran ranks as the sixth-largest oil producer globally, and the closure of the Strait of Hormuz — normally handling approximately 20% of the world’s daily oil supply — has produced an energy shock. The WTO’s chief economist has flagged the conflict as the defining issue for global trade in 2026.
As of this writing, President Trump has signalled he is not planning ground troops and has suggested the conflict could end “very soon” — but the on-the-ground reality remains deeply uncertain.
Markets Most Impacted Since the Start
Understanding where a rebound will happen first requires understanding what has been hit hardest. The market reaction since February 28 has been sharp, asymmetric, and in some cases, historically extreme.
Oil and Energy
The most dramatic single move has been in crude oil. Brent crude has surged 48% since the start of the conflict, climbing above $114 a barrel. Goldman Sachs estimated as early as March 3 that traders were demanding a $14 risk premium per barrel above pre-conflict prices. Persian Gulf producers have been forced to cut production by roughly 6% as local storage fills to capacity, and Goldman Sachs warned that if the Strait of Hormuz remains closed, Brent could exceed the 2008 all-time high of $150 a barrel.
Conversely, energy stocks have been enormous winners. In premarket trading on March 1, Exxon Mobil surged 5.4%, Chevron 4.1%, Occidental Petroleum 6.6%, and APA 7.9%. These gains have been sustained as the oil premium has held.
Global Equities
The damage to broad equity markets has been more measured. The S&P 500 logged its third consecutive weekly decline by mid-March, with the index down approximately 1.6% in the week ending March 13 alone. The Dow Jones fell over 400 points on March 2 and the S&P 500 dropped 0.7% that single day.
Asian markets have suffered the most, given their extreme dependence on imported energy and Middle Eastern trade routes. Charles Schwab noted that “Asia and Europe are most vulnerable,” and that market leadership is unlikely to revert to international markets for as long as the energy shock persists.
European equities have experienced sustained pressure too. The Stoxx Europe 600 fell 0.8% in a single session mid-March, with mining and banking stocks leading declines. European natural gas has jumped as much as 35% following damage to the world’s largest LNG export facility.
Airlines
Airline stocks have been amongst the most punished sectors. United Airlines, American Airlines, and Delta all dropped more than 6% on March 2 alone, with further losses accumulating since. European airline stocks have fallen 10% or more due to airspace closures across the Middle East and the collapse of regional travel hubs. Higher jet fuel costs threaten to reduce airline earnings by 15–20% according to some analyst estimates.
Safe Havens
Not all markets have suffered. Gold surged 5.2% on March 1 to $5,246 per ounce, touching $5,400 shortly after, as investors flooded into safe-haven assets. The US dollar has also strengthened significantly, cementing its safe-haven status as gold’s rally has since proved volatile and uneven. Defence stocks have been consistent outperformers, rallying on expectations of sustained government spending.
What Happens When the Guns Fall Silent?
History offers a guide: markets tend to snap back sharply and quickly when geopolitical crises resolve. The 1991 Gulf War, the 2003 Iraq invasion, and the 2022 Ukraine shock all show that while initial reactions can be severe, the recovery — once a credible peace signal emerges — can be equally dramatic. We already saw a preview of this dynamic: when Trump suggested the conflict was “very complete, pretty much” in a CBS interview on March 9, oil slid below $100 a barrel and European stocks jumped in a single session.
Here is what a genuine ceasefire or resolution may likely trigger across asset classes:
Oil: The Biggest Single Move
The arithmetic here is straightforward. With an estimated $14–$18 war risk premium currently embedded in crude, a credible peace deal and the reopening of the Strait of Hormuz would see a rapid and significant unwind. Market analysts have floated a stabilisation in the $70 range as the most likely post-conflict oil price if a “grand bargain” is reached and Iranian crude — around 191 million barrels currently in transit — re-enters the market. This would be a deflationary shock to the global economy in the best possible sense: lower fuel costs, easing inflation, and a restoration of consumer and business confidence.
However, the speed of the drop matters. A chaotic, uncertain peace — where the political future of Iran remains unclear and the Strait is only partially re-opened — would see oil remain elevated, perhaps in the $85–95 range, as geopolitical uncertainty lingers.
Global Equities: A Broad Rally, Led by the Hardest Hit
A peace deal would almost certainly trigger a broad global equity rally, but the composition of that rally will be uneven:
- Asian markets stand to rebound the most sharply, given they have sold off the most and would benefit directly from the restoration of affordable energy supplies and normalised shipping through the Strait of Hormuz
- European equities — particularly industrials, consumer discretionary, and financials — would recover as inflation expectations are revised downward and the ECB regains room to manoeuvre on rates
- US markets have been the most resilient during the conflict and may therefore show a more modest bounce, though a $30–40/barrel drop in crude would provide a meaningful earnings tailwind for the broader S&P 500
- European airlines, particularly easyJet which Morningstar flags as having over 50% upside even before factoring in a peace deal, could be among the most dramatic individual sector winners as fuel costs normalise and travel routes reopen
Airlines: A Textbook Relief Rally
This sector arguably has the cleanest trade on a ceasefire. Airlines have been punished by both the oil price spike and the collapse of Middle Eastern air travel routes. A resolution would simultaneously reverse both headwinds. American, United, Delta, and their European counterparts could see double-digit percentage moves higher in a single session on credible ceasefire news.
Defence: Profit-Taking After the Rally
Defence stocks have had a stellar run. Companies like Lockheed Martin, Raytheon, and BAE Systems have benefited from both the conflict itself and the accelerated rearmament it has prompted across NATO and allied nations. A ceasefire would likely trigger short-term profit-taking, though the structural argument for elevated defence spending — which predates this conflict — means any pullback is likely to be modest and temporary.
Gold: Easing, but Not Collapsing
Gold’s war premium would ease on a genuine peace deal, but gold’s broader bull run reflects factors well beyond Iran: US fiscal deficits, de-dollarisation trends, and central bank buying. Expect some unwinding of the conflict premium — perhaps a pullback from current levels — but not a return to pre-2026 levels.
The Dollar: A Modest Pullback
The dollar’s safe-haven status has been reinforced by the conflict, and a resolution would likely see some modest weakening as risk appetite globally is restored and capital flows back towards emerging markets and international equities.
The Uncertain Road to Peace
It would be naive to assume resolution is imminent or clean. Al Jazeera’s geopolitical analysts have argued the war “will not end with a clear victor” and is unlikely to evolve into a comprehensive peace process any time soon. With Trump reportedly unwilling to negotiate as recently as March 13, and Iranian retaliatory capacity still active across the region, the path to a ceasefire remains deeply uncertain.
The most likely scenario — what analysts at Alpine Macro have termed the “prolonged, uncertain endgame” — is a gradual winding down of hostilities over weeks, not days, with partial restoration of Strait of Hormuz traffic before a formal political resolution. In this scenario, markets would move in fits and starts: rallying on each de-escalation signal and retreating on each new strike.
For investors, the key signal to watch is not rhetoric from Washington or Tehran, but oil tanker traffic through the Strait of Hormuz. The day crude tankers begin moving freely through that 21-mile chokepoint again is the day the war premium dissolves — and the day the most significant market rebound since the conflict began will get underway.
The views expressed in this blog post are for informational and educational purposes only and do not constitute investment advice. Past market reactions to geopolitical events are not a guarantee of future performance.
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